Treasury and EC may clash over diesel taxes
European Commission proposals to halve diesel duties may be opposed by the Treasury in defence of its powers over UK taxation.
Savings of up to £6bn a year for UK road hauliers would result from EC proposals to cut UK duties by over 50% in a bid to iron out Europe-wide tax distortions. Hauliers from low-taxation states currently have an advantage over UK truckers, who face high duties.
Harmonisation would eliminate duty differences but would cost the UK an estimated £6bn – a move likely to be fiercely contested by the Treasury.
Protests over fuel prices caused UK transport chaos in autumn 2000.